At this time, many boards are focusing on the annual operating plan (AOP) for 2023. Projecting financial performance may be difficult given continuing supply chain issues and market volatility, inflation, and a tight labor market in certain sectors. For private companies, there is added pressure to get the AOP right. Private companies often use the AOP as the target for the annual bonus plan and for shareholder distributions. Here’s how private companies can structure the appropriate bonus program and goals for 2023.
An article authored by Partner Susan Schroeder was published by the National Association of Corporate Directors. Susan discusses several aspects of corporate governance that are important to family businesses and may require different treatment than at venture-backed private companies or public companies. The key issues discussed are corporate strategy, succession planning, recruiting and retaining key talent, and performance evaluations. When discussing these issues, it is important for family business board members to communicate with all stakeholders in a transparent manner and to ensure that all relevant parties have a voice in conversations related to the business.
An article authored by Partner Bertha Masuda was published by the National Association of Corporate Directors. Masuda tackles the challenge of developing compensation plans for private family companies. She outlines framework of key principles for thinking through the existing issues, the best practices, and available survey data to enable family company boards to make the best decisions possible. The key principles she mentions include governance, pay philosophy, incentive plan design, and communication. Utilizing such framework will enable boards to develop an appropriate compensation plan that aligns with the interests of both executives and shareholders.
CAP Partner, Susan Schroeder, discusses what private companies can do to remain competitive in the current economic environment and be able to attract and retain the talent needed to run their businesses. In today’s environment, the attraction and retention of talent is broader than just focusing on salary, annual bonus, and long-term incentives. Private companies can really differentiate themselves by an enhanced focus on “total rewards.” Employees care about other aspects of work that may not be directly compensation-related but have value to them. There is also a renewed focus on company culture and an organization being considered a “good” place to work.
CAP Partner, Susan Schroeder, is featured in NACD Directorship Magazine – Spring 2022 for being honored as a 2022 NACD Directorship Top 100 Governance Professional.
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CAP Partner Bertha Masuda shares with NACD Online what companies planning for an initial public offering (IPO) need to do to prepare their executive compensation programs for the transition to being a public company.
As competition intensifies for attracting and retaining diverse and talented directors, private companies are reviewing the plan design and pay levels of their director compensation programs to compete for talent with their publicly traded peers. Partner Susan Schroeder shares four best practices in designing and implementing a new director compensation program: determine the primary objectives of the program, conduct internal and external assessments, decide which pay components to adopt, and calculate total cost of director pay program.